Rob Rainwater, Mike Kunkel and Lee Worman of Profit Team Consulting will be hosting bi-weekly virtual training sessions for the Ontario Automotive Recyclers Association now through June 3.
Recyclers look back on lessons learned in 2020
BY ALLISON ROGERS
As an essential business amid COVID-19, the strength of the North American automotive recycling sector has been thoroughly demonstrated—and investors are taking note.
During the first of the Ontario Automotive Recyclers Association’s (OARA) virtual training series, guest speakers Rob Rainwater, Mike Kunkell and Lee Worman from Profit Team Consulting discussed the various lessons auto recyclers have pocketed amid the pandemic.
While Worman said the industry always knew it was essential, the pandemic reaffirmed this belief not only to auto recycling businesses across the country but to the wider economy. “We always knew we were essential. Thanks to this label, we’ve been able to lessen the impact on the financial side of things and we’re very, very fortunate as auto recyclers,” said Worman.
“There are definitely a lot of equity firms out there now approaching our industry in a whole new light.”
Worman said equity firms and investors are already noticing the strength of the sector and considering investment opportunities in various verticals.
“A lot of equity firms have looked to move money toward our industry, whether it’s on the scrap side or on the salvage side. The best part about that is that it has also made our businesses worth more than they were before.”
The Profit Team Consulting group also said the idea of remote salespeople can hugely benefit businesses in the post-pandemic era, as can the idea of a “hybrid staff.”
“When you can hire remote, your ability to hire a better staff member has increased exponentially,” said Worman. “Pre-pandemic, your hiring pool was a much smaller group. The entire country of Canada may be up for hire in a remote environment.”
“You’ve got to find your niche to go deeper and understand and reap the true value of the vehicle and its parts. The buying of the vehicle is not a lazy man’s job,” – Rob Rainwater, Profit Team Consulting
According to Profit Team Consulting’s experts, the future holds a number of positives for auto recyclers; but the benefits don’t come without contrasting challenges.
• The rise of EVs and PHEVs
- 59 new models were introduced in 2020; 75 new models are coming in 2021
• Farewells to OE brands and models
- Pontiac, Mercury, Saturn, Hummer
• Stop and Go
- Supply lines will continue to be interrupted, creating demand with limited supply and opportunity for recyclers
• Your Friendly Online Recycler
- Electronically located parts will continue to expand
• Part Swap
- Expansion of trading networks opens up greater opportunities for recyclers
• Shrinkage Ahead
- Consolidation continues to add more credibility to the industry in the U.S. and Canada; potential to build value to businesses
UPCOMING OARA SESSIONS:
• April 22nd, 3:00 pm
– Buying, processing and inventorying cars
• May 6th, 3:00 pm
– Recyclers Roundtable
• May 20th, 3:00 pm
– Dismantling, shipping and receiving: what happens after the sales team take the order and how your parts flow through to the customer.
• June 3rd, 3:00 pm
– Ask the Experts Visit oara.com/events for more information.